O-G 2010-11 budget expected to end in black

Published 7:00 pm, Tuesday, November 23, 2010

By TRACI L. WEISENBACH

Tribune Staff Writer

OWENDALE — Black usually is not a color used for pleasurable occasions, as the color brings to mind more somber occasions. At Owendale-Gagetown Area Schools, however, black brings a reason to smile — at least, when it comes to the budget.

During the board of education meeting Monday night, Interim Superintendent Bob Drury presented amended general budget figures to the board. He said he previously had a meeting with the board’s Budget Committee, K-12 Principal Terri Falkenberg, bookkeeper Mary Ann Minkler and Huron Intermediate School District business services representative Stacy Haag. At this meeting, the amended budget was discussed more in depth, but Drury noted some highlights at Monday’s meeting.

The biggest highlight? The district should eliminate its deficit and have a fund balance of $2,525 by the end of the fiscal year June 30, 2011.

“I’m not jumping up and down, but it’s pretty good news,” Drury said. “We’re not out of the tunnel, but we can see the light at the end.”

According to figures Drury presented, which he called “the best accurate look at where we’re at as a school district,” revenues for the fiscal year will total $1.94 million and expenditures will total $1.91 million. This will leave a revenue surplus of $34,728.

The 2009-10 audit report, which was presented to the board at its October meeting, showed the district had a fund balance deficit of $32,203. With the revenue surplus, the deficit will be offset and there will be a small amount in the fund balance — less than one percent of the budget.

However, a small amount in the black is better than being in the red by $32,203, Drury noted.

“We can get off the (state’s) most wanted list,” he said with a smile.

Drury was referring to the list of districts statewide that have a deficit fund balance. According to the Senate Fiscal Agency, there are 42 districts with budgets in the red (including Owen-Gage).

The district’s budget deficit began in fiscal year 2007-08. At the end of that year, the budget was $18,800 in the red. By the end of the 2008-09 fiscal year, the deficit increased to $27,472, according to audit figures.

He said Owen-Gage’s original 2010-11 budget, approved by the board in June, was “unrealistic.” He noted this was because the district, per state requirements, needed to submit a balanced budget to the state — even though the district could not balance the budget because of the deficit in the fund balance. He said the state is aware of the district’s deficit situation, but the state still required the district to submit a balanced budget. Because of this, line items in the budget had to be tweaked to show a balanced budget. This led to a budget that didn’t accurately reflect actual revenues and expenditures.

Drury said another issue is the original budget is based on certain assumptions, because many financial details (such as student enrollment and per-student state aid amounts) are not yet known. As the fiscal year moves forward, districts receive more accurate budgetary information from the state and other sources. Districts then can amend their budget to make it more accurate.

The district may even see a sunnier picture by the end of the fiscal year. Drury said the current budget figures are conservative on the revenue side and liberal on the expenditure side.

“We want to paint a worst case scenario — we want some cushion in the budget for the unexpected,” he said.

The board approved the presented budget amendments. Drury noted another amendment will be presented to the board in February or March.

He said the district could receive some extra federal revenue, which would provide some extra padding. However, this extra revenue would only be for the current fiscal year, as it likely would not come again in 2011-12.

Drury said educational experts in the state are predicting a $400 per-student revenue reduction for 2011-12. He said this would mean an $80,000 cut in revenue for Owen-Gage.